Bernard Allen
Question:8 Mr. Allen asked the Minister for Tourism, Transport and Communications if he will make a statement on the Government's handling of the Telecom affair.
Ceisteanna — Questions. Oral Answers. - Sale of Ballsbridge (Dublin) Site.
Ruairí Quinn
Question:33 Mr. Quinn asked the Minister for Tourism, Transport and Communications if he will make a statement on the investigations being conducted into the sale of the former Johnson Mooney and O'Brien premises in Ballsbridge, Dublin 4 and the ultimate purchase of that premises by Telecom Éireann; and if he will make a statement on the matter.
Pat Rabbitte
Question:37 Mr. Rabbitte asked the Minister for Tourism, Transport and Communications the progress which has been made with regard to the implementation of the recommendations contained in the report of the inquiry conducted by his Department into the acquisition of a site for Telecom Éireann headquarters at Ballsbridge, Dublin 4; and if he will make a statement on the matter.
Dick Spring
Question:43 Mr. Spring asked the Minister for Tourism, Transport and Communications if he will outline any and all investigations taking place into property transactions involving Telecom Éireann; and if he will make a statement on the matter.
I propose to take Questions Nos. 8, 33, 37 and 43 together.
I established a formal inquiry on 14 September 1991 into the transactions leading up to the acquisition of the Johnston, Mooney & O'Brien site by Telecom Éireann on 29 June 1990; the inquiry was extended on 20 September 1991 to cover additional properties at Merrion Road, O'Connell Street, St. Stephen's Green and at the Gaiety Centre. On 29 October 1991 the inquiry was further extended to cover the sale of property at Dundrum, County Dublin, which took place in 1983.
The committee of inquiry commenced their investigations on 23 September 1991. The inquiry decided to concentrate their initial efforts on establishing the facts regarding the transactions relating to the Ballsbridge site as that property was the property which had been the primary source of public concern.
Most of the individuals and company officers who were interviewed by the inquiry offered to co-operate fully with the inquiry. By 1 October 1991, however, the inquiry reached an impasse in so far as certain individuals/companies who had undertaken to provide information had not in fact done so. The inquiry was surprised by these developments and felt that they could cause serious delay to their work. The inquiry concluded that it should, therefore, request the immediate appointment of an inspector under the Companies Act, 1990.
The inquiry presented their report to the Minister for Tourism, Transport and Communications on 1 October 1991. The inquiry was conducted by the secretary of the Department of Communications with assistance of specialist legal, financial and property advisers from the public sector. The inquiry team worked under extreme pressure and for long hours to produce their comprehensive report in less than two weeks. They performed admirably and researched and conducted interviews in an effective, thorough and professional manner.
When I established the inquiry I publicly declared that I would publish the facts and I honoured that commitment. The inquiry established 15 key facts and made five important recommendations. The first two recommendations related specifically to procedures by Telecom Éireann in property purchase and disclosure. These have been accepted by Telecom and are being implemented as appropriate. Recommendations Nos. 3 and 4 refer generally to the Companies Act and have been presented to Government. Recommendation No. 5 asked for the appointment of an inspector under the 1990 Companies Act.
The Minister for Industry and Commerce has appointed an inspector under section 14 of the Companies Act, 1990, to investigate and report on the ownership of Hoddle Investments Limited and Chestvale Properties Limited. That investigation is ongoing.
With regard to the sites other than that at Ballsbridge investigations are continuing and a report will be issued in due course.
Would the Minister agree that the photograph which appears in some of the daily newspapers today tells its own story about this affair. In respect of the recommendations to which the Minister referred, does he acknowledge that one of the recommendations of the McDonagh inquiry was that it probably would be necessary to amend the Companies Act because the appointment made under section 14 of the existing Companies Act may well be deemed to be inadequate to get behind especially the critical Cypriot connection and that the appointment made under section 14 has all the powers of an appointment made under section 8 except it does not give critical access to bank accounts? If those persons continue to obstruct successfully the administration of justice in this area, will the Minister advise that section 8 of the Companies act be amended?
I would have no hesitation and I am sure no member of the Government would have any hesitation, in doing that. As of now, the inquiry is proceeding under the Companies Act and I have no reason to believe they will not make good progress. The Deputy is quite right when he says that the inquiry conducted by Secretary McDonagh did suggest that the Act should be looked at and I understand the Minister for Industry and Commerce will do that.
Would the Minister not agree that it was open to him to seek the appointment of the inspector in this case under section 8, and thereby have the powers to follow financial transactions, rather than under section 14 which is the power he chose to use?
The inquiry suggested that section 8 be used. I gather it was on that basis, and on other factors obviously, the Minister made his decision.
Is it not the case that the existing Companies Act contains provisions under which an inspector can obtain information about bank accounts and that for some reason the Minister for Industry and Commerce chose not to use that power which is already in the existing Act, without amendment, but used instead a power under which an inspector does not have the ability to go after bank accounts? Would the Minister state if he had any consultation with or made representations to the Minister for Industry and Commerce to ask him to use that power to ensure, without an amendment to the Act, that the inspector and ultimately the public would have information based on access to bank accounts in this case?
I did discuss the matter with the Minister for Industry and Commerce and he took account of the McDonagh inquiry which proposed that a certain section be used. The Deputy will understand that there are two sections, the first concerning the High Court and, second, concerning the Minister. They have different powers but, as I understand it, there are also different conditions laid down under which he would appoint such inspectors. I gather, in one case, there has to be prima facie evidence of fraud or something of that nature. However, that is a matter for the Minister for Industry and Commerce and my inquiry recommended to him that he would appoint an inspector. He selected the section which he thought was appropriate at the time.
May I put it to the Minister — and this is intended to be helpful having being involved, as Deputy Rabbitte was, in the committee which dealt with this legislation — that the section which the Minister for Industry and Commerce failed to use does have sufficient grounds for the appointment of an inspector in this case in regard to the affairs of the company, i.e. Telecom, and associated transactions, and should have been the powers used? Will the Minister agree to re-examine the Companies Act, in consultation with the Minister for Industry and Commerce, with a view to having an inspector appointed who can go after the money because, unless we have information about the money, it will be possible for those using overseas companies simply to conceal relevant information about who is really behind particular transactions? It is only through a bank account that one knows who is benefiting from any transaction.
I completely accept that and I will be happy to look at the matter again in so far as I have an obligation — or remit — to look at the Companies Act. The Deputy is quite right, when one traces the money one finds out what is going on. Let me be clear about one thing, the McDonagh inquiry, the inquiry of the Secretary of my Department, recommended to the Minister for Industry and Commerce that he take action under the Companies Act and it was envisaged that they would use the strongest possible means. I have no doubt, from my discussions with the Minister for Industry and Commerce, that he wished to use the strongest possible section of the Companies Act, that was his wish, he obviously took advice on which sections were appropriate and took the strongest possible section which was open to him to use at the time. As I said, there is no difficulty in looking again at the Companies Act to see whether we can improve it.
Deputy J. Bruton rose.
I wanted to call Deputy Rabbitte again. A number of Deputies are offering; I want to bring the matter to finality and also deal with other questions. I want to call Deputies Noonan (Limerick East), Rabbitte and John Bruton.
I promise that this will be my last question. I put it to the Minister that it would have been wise — even if the Minister for Industry and Commerce had had doubts as to whether he could use the particular section — to at least apply to the High Court and let the court decide he could not act under that section instead of deciding himself, as he did, and failing to obtain the necessary power.
I cannot answer for the Minister for Industry and Commerce. However, my understanding from discussions I had with him was that that course of action was not open to him because there had to be prerequisites before he could take such a step.
He should have let the High Court decide.
I suggest that the Deputy table a question in that regard to the Minister for Industry and Commerce.
I call Deputy Rabbitte and I will hear a final question from Deputy Noonan (Limerick East).
I want to pursue that point because the Minister seems to have accepted that the critical thing here is to follow the money trail. He also seems to accept that we will not get behind the Cypriot connection — and, therefore, the back of the entire scam — unless we get access to the bank accounts concerned. Will the Minister agree that it seems odd, especially in the absence of him being able to explain clearly to the House why the Minister chose to make the appointment under section 14? Will the Minister express his concern that some of the principals involved in this affair seem to be obstructing the smooth working of the inspector in his inquiry?
I certainly call again — as I am sure every Member would — on everybody concerned to fully co-operate with the work of the inspector. I expect that everybody will do that; it is important to finish the job of getting to the bottom of what happened in the Telecom Éireann matter. I am determined that that will happen and I know the Minister for Industry and Commerce is also determined in this regard. I assure the Deputy that any action which needs to be taken to ensure it will happen, will be taken.
(Limerick East): Will the Minister agree that the inquiry under section 14 of the Companies Act being conducted now by the inspector appointed by the Minister for Industry and Commerce is in danger of being baulked because, as other Deputies have pointed out, the inspector cannot follow the money trail? Is the Minister also aware that there is contrary legal advice available——
Exactly.
(Limerick East):——to many of us on this side of the House that the Minister for Industry and Commerce could appoint an inspector under the High Court, despite the preamble to section 8, who would not be baulked in pursuit of the money trail? Will he have discussions with the Minister for Industry and Commerce to take the view of this side of the House into account to see whether he can proceed forthwith to appoint an inspector under section 8 who could follow the money trail and operate with the full powers of the High Court behind him?
I am not aware that the inspector said, to date, that he cannot follow the money trail. I am aware, as is the Minister for Industry and Commerce, of the preamble to that section in regard to a High Court appointment. Obviously my colleague, the Minister for Industry and Commerce, took the view that the preamble prevented him from going that route. His judgment was that the other route would be speedier and equally effective.
Let the High Court decide.
That was the Minister's judgment and perhaps the Deputy would like to question him in that regard. I will certainly pass on to him the legal advice which the Deputy appears to have received and I will suggest that he study the comments made today in the House. We all want to get to the bottom of this and it is important that we do so speedily.